The Broadbent Blog

Putting the Supreme Court ruling on Aboriginal title in context

Thursday’s stunning Supreme Court of Canada (SCC) ruling, extending the scope of Indigenous rights to include the right to permanently control “land conferred by aboriginal title”, has the potential to transform the politics of resource extraction and development in Canada.

Governments and companies seeking to use land (say, for resource development and infrastructure) to which an Indigenous group has title will now require the consent of the Indigenous groups involved. Indeed, the court found that where Indigenous title exists, it is exclusive: in other words, the Indigenous groups in question have the exclusive authority (with some important exceptions) to determine who can use and benefit from the land – and the resources on that land.

This ruling will almost certainly up the ante on the sham consultation initiatives normally undertaken by governments and (increasingly) industry where Aboriginal title is asserted but not yet proven, or where unresolved land claims exist. It amounts to tacit acknowledgement from the highest court that what governments and mining companies have been doing since time immemorial is not only unethical, but also illegal. (Unfortunately, the court still reproduces colonial tropes like settler “discovery" and places the burden of proof on Indigenous groups to prove and fight for title to land they never ceded.)

In going further than previous SCC decisions in its definition of Aboriginal title, this ruling cuts to the quick of one of the most salient dimensions of Aboriginal and non-Aboriginal relations in Canada: the dispossession of Indigenous peoples of their lands and the ability of the Crown to assert sovereignty over this land.

Indigenous rights: “managing risk”

The SCC ruling provides Canadians an important opportunity to reflect on the colonial fiction of crown sovereignty, and on some of the ways in which it continues (despite this ruling) to legally inflect resource extraction in Canada. It also illuminates how, especially since the election of a majority government for the Harper Conservatives, Canada’s environmental governance regime has been reconfigured to manage and protect against threats posed to Crown control over Indigenous lands by Indigenous rights.

Recent attempts to “manage” Indigenous rights (including title) in relation to mineral exploration and development are particularly instructive.

Facing rights-based Indigenous resistance movements like #IdleNoMore and successful moves by Indigenous communities to stall the development and expansion of large-scale extractive projects, the Canadian mining industry has begun to identify Indigenous rights as a significant barrier. Costs, time delays, and threats to investment embodied in regulatory and informal requirements to respect and accommodate Indigenous rights, as well as “uncertainties” related to title represent what the Prospectors and Developers Association of Canada (PDAC) call one of the most important “new” risks faced by exploration firms.

In a joint pre-2014 budget submission, the PDAC and the Canadian Mineral Industry Federation suggested that “land access challenges… most notably from unsettled land claims”, “increasingly complex Aboriginal Relations,” the “constantly increasing level of complexity related to the crown’s duty to consult”, and increased “complexity and ambiguity” with respect to the requirement for consultation efforts, represent some of the most notable “uncertainties” currently pushing companies to defer projects.

In advance of the last three federal budgets, mining industry associations and Canadian Chamber of Commerce have actively lobbied the Harper government to manage Indigenous rights via a federal tax mechanism called flow-through financing (FTS). This is a tax-based mechanism for financing mineral exploration and development that allows mining companies to “flow” tax deductions for qualifying exploration and development expenditures “through” to investors in exchange for cash in connection with the sale of equity. In some cases, investors in mining ventures can also claim an additional 15% non-refundable investment tax credit (the Mineral Exploration Tax Credit).

As research conducted by the PDAC in late 2013 reveals, in recent fiscal years exploration firms have successfully claimed expenses associated with addressing Indigenous rights as a portion of their exploration and development expenses and have successfully renounced them as part of flow-through financing arrangements. While the Harper government has yet to officially clarify this tax interpretation, it reflects what mining industry associations have been lobbying for since late 2011: the eligibility of costs associated with addressing Indigenous rights for flow-through financing, and the increased ability to manage liabilities presented to mining capital by Indigenous rights and sovereignty.

This move by the mining industry can be understood within the trend towards increased police and military surveillance of Indigenous resistance struggles in which expressions of Indigeneity and Indigenous peoples themselves are increasingly identified by federal and territorial authorities as “terrorist” and “violent extremist” threats to national security. Indigenous rights, and rights-based opposition (including legal victories) are viewed by the state as “very high risks” to federal policy agendas and as a financial liability for the Canadian government.

The FTS tax exemption is an attempt on behalf of mining companies by the Harper government to “risk manage” Indigenous rights. It allows threats to investment to be transferred away from firms and investors and spread as risk across financial markets. Flow through shares are issued at a price that reflects the added value of forecast or actual expenditures incurred in relation to addressing Indigenous rights. Expenses associated, for instance, with negotiating agreements related to exploration and development and costs incurred in relation to resolving rights-based legal challenges to development could be flowed-through to investors in exchange for cash.

Flow-through financing is nothing more and nothing less than a risk management strategy aimed at Indigenous rights and the threat they pose to Crown control over Indigenous lands. It allows them to continue to benefit from colonial arrangements and inequalities that provide them unfettered access to the lands, resources, and increasingly the labour force they need to turn a profit.

To the extent that today’s Supreme Court ruling begins to shake the foundations of Crown sovereignty over Aboriginal land, and provides more room for assertions of Indigenous title – which crucially now includes the ability to say no to development projects on their land or to form new and more equitable partnerships – it should be welcomed.

But there is still much work to be done to rectify Crown-Aboriginal relations and further dismantle the remnants of settler colonialism.

Anna Stanley is faculty at the National University of Ireland, Galway, where she teaches and does research in political ecology and environmental justice. She is currently Visiting Professor at Ryerson University, Toronto in Politics and Public Administration and has worked with a number of First Nations and First Nation advocacy organizations as a policy analyst.